Auctions are a means of selling items by placing items up for bid, collecting bid prices from a number of buyers, and then selling the item to the highest bidder. It is believed that auctions have been used as least as early as 500 B.C. when women were auctioned off as wives to Babylonian men.
In 1995, the auction process reached the Internet when a Japanese company auctioned off used cars over the Internet. Later that year eBay started an on-line auction website that allowed users to not only bid on items, but also place items up for bid. Today eBay has over 181 million registered users worldwide and in 2005 handled a gross merchandise volume of $44.3 billion. Since 1995, many other on-line auction sites have opened allowing anyone with Internet access to participate as either a buyer or a seller. Online sites have auctioned items ranging from a single kidney bean to a Gulf Stream jet airplane.
Most auction sites allow the bidder to search for items by keyword or browse by category. Once the items matching the bidder's criteria are found, they are listed along with information such as a description of the item, the item's selling price, the time left on the item, the item's current price, the top bidder of the item, and a picture of the item. The bidder can then decide if they wish to place bids on one or more of the items listed.
However, each item search invariably yields multiple sellers offering comparable items. Buyers often want “any one of these”, so several of the listings would be suitable, but the auction system allows the buyer to bid on only one seller's auction at a time (unless, of course, the buyer is trying to buy multiple items).
This means buyers that would otherwise be quite satisfied with one seller's listing end up bidding on another seller's listing. What is worse, there is very little chance the buyer will return to the first seller, or possibly any seller, if the buyer loses the auction for the other listing.
Since there is only one winner per auction, this means scores of buyers who could be happy with an equivalent item will never bid on it.